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Amalgamated Plantations Private Limited (APPL), the second largest tea-producing company in the country, will be offering its spice products under the brand name Anshi.

Anshi means “God’s gift” in Sanskrit.

The company commissioned Amalgamated Spice Park, the largest spice-processing plant in the Northeast which is housed at a state government industrial facility at Kaliabor in Nagaon district on July 29.

Assam chief minister Tarun Gogoi inaugurated the project. Besides this, he also inaugurated three more projects of the company.

A senior official of the APPL said in order to be more customer-centric and offer some of its products directly to end-consumers, it has decided to market them under the umbrella brand Anshi.

“It would encapsulate and connote everything that the APPL’s products would offer. Its place of origin and the resultant goodness in health and taste that only natural foods can promise,” he said.

The unit is spread across 6.2 bighas with a built-up area of 30,000 square feet.

“The Spice Park aims to promote the indigenous spices of the Northeast through fair price, value additions and creating market linkages in domestic and international markets for the spice-farming fraternity,” the official said.

It will have three processing lines – one for tuber spices like ginger and turmeric, second for seed spices like black pepper, coriander, mustard and the third one for chilli processing.

Many of the spices have been sourced from spice-specific clusters identified at various locations in the region.

The company at present grows only black pepper and has planted over three lakh trees.

“In the next two years, this figure will be approximately seven lakh trees. The current production is 40 tonnes and on maturity this figure will exceed 600 tonnes,” the official said.

Black pepper is the most-traded spice in the world. It is known as the king of spices for its hot, biting flavour and pungent aroma.

The plan at present is to sell spices to manufacturers across the country. Spices would be available at its kiosks in Assam and the Dooars. Exports will be planned at a later stage.

“The unit has been designed to address sustainability issues through initiatives in water and waste management, use of alternative sources of energy and landscaping for improving air quality,” the official said.

Agriculture has to produce more raw materials to satisfy the increasing and diversifying demands of a growing world population, which is expected to grow by more than a third (around 2.3 billion people) between 2009 and 2050; these figures are often repeated, and for good reason – the challenge they present to global food production is enormous. Projections show that feeding a world population of 9.1 billion people in 2050 will require raising overall food production by some 70% between 2005 and 2050.

Our demands on agriculture don’t stop at production, the sector must also contribute to economic prosperity and the social well being of rural areas, and help preserve natural resources such as land, water and biodiversity – in the face of pressures from urban expansion, industrialization and a changing climate. There is also a pressing need to protect and restore the quality of existing farmland.

Highly productive and resource efficient agriculture mitigates the problems associated with all of these challenges, because it enables us to have more of everything – more crops, and more biodiversity and natural habitats.

Agriculture is a major contributor to land use change, which often implies the destruction of natural habitats – the single most important driver of biodiversity loss. By protecting crops from pests and disease, farmers can optimize yields on the existing agricultural land base, make efficient use of resources (inc. fuel, time, and capital) and prevent the loss of natural habitat that occurs when agricultural land expands to compensate for crop losses.

Without crop protection, losses for certain crops can exceed 80% of potential yield, and low input farming – as typified by organic agriculture – is estimated as averaging up to 34% lower yields than productive agriculture within the EU.

If we wish to maintain and improve yields and make efficient use of natural resources, the use of plant protection products must continue; there are currently no viable alternatives to pesticide use in either conventional or organic farming. Efficient production technologies are imperative to allow us to close yield gaps; however, society must use these technologies in an appropriate way to ensure that agriculture plays a central role in delivering sustainable solutions.

Pesticides are formulated to protect crops by discouraging, confusing, altering the behaviour, or killing target pests, diseases and pathogens. When we consider biodiversity protection, this raises questions about the impact on non-target species that may be unintentionally exposed to pesticides.

Modern pesticides are characterized by their high efficacy and targeted modes of action; the biologically active characteristics of pesticides that pose risk to non-target species are acknowledged and accommodated in European pesticide regulations. Pesticides are one of the most regulated product classes on the European market, and the real drivers of the large scale loss of biodiversity (including land use change) are not subject to regulation as rigorous as that applied to pesticides.

Science, research and development have given us sophisticated crop protection solutions. While their use is certainly not without risk, a sensible, risk-based approach to EU legislation ensures farmers have access to products that when used correctly have no unacceptable effects on their health or the environment. This same stringent legislation allows European consumers a high degree of confidence in the safety, availability and affordability of their food.

Our industry is committed to providing sustainable crop protection solutions; we believe that for agriculture to be sustainable, it must be efficient, productive and contribute to a resilient natural environment. We are acutely aware of society’s demand that crops be produced with minimal environmental impact – and we know that this can only be achieved if farmers have access to appropriate tools and knowledge of best management practices.

As society embraces the challenge of sustainable agriculture, there is growing consensus on the need to combine high agricultural productivity with well-considered environmental protection; however, Europe’s full potential will only be realised with ambitious science-based policy and political support for innovation. The combined challenges of agricultural production and biodiversity protection require that we exploit proven technologies whilst continuing to invest in the research and development of solutions for tomorrow.

Strong public support for biodiversity protection, a knowledgeable and passionate community of famers, and the engaged expertise of industry can be combined to make the rural environmental more biodiversity friendly and more productive.

Amalgamated Plantations Private Limited (APPL) — the second largest tea producer in the country — will commission the largest spice processing unit in the Northeast by the year-end.

Spread around 6 bighas with 30,000 square foot built-up area, the spice unit will come up in December at Naltoli in Nagaon district and will have production facilities forprocessing ginger, turmeric, black pepper, bay leaf, bhut jolokia, mustard and coriander. The spice unit, which will source products from the region, will be housed at the Integrated Infrastructure Development Centre of the Assam government.

“We are growing only pepper in our gardens. The rest will be aggregated from farmers across the region,” told a senior official of the APPL, who looks after its agri-business.

Altogether 3,46,000 pepper vines have been planted, of which 46,000 vines have borne fruit. Self-sufficiency in planting material has been achieved after independent nurseries were set up in all the 25 gardens of the company.

APPL aims to become the country’s largest producer of black pepper, the king of spices, by 2025. The company is investing Rs 20 crore in the spice unit, which will be set up in two phases. The spices will be sold under a brand name. Technical help and post-harvest management support will be provided by expert bodies.

“We will first look at selling to exporters and based upon the response, we will look at the consumer market,” the official said.

He said marketing channels have already been established with the organised sector comprising extractors, blenders and exporters. These sectors will form the core of the company’s marketing efforts and agri-business production, he said.

According to the Spices Board, the region can create exportable surplus of spices at competitive prices to ensure the country’s top spot in the international spice market.

The board is planning to provide financial assistance to spice growers’ co-operatives, farmers’ associations, NGOs representing spice growers and individual entrepreneurs in northeastern and hill states in the 12th Plan to establish primary processing facilities for organised marketing of the produce in the domestic and international markets with possible value addition.

APPL is a full-member of the Sustainable Spices Initiative, which brings together leading international companies and NGOs aiming to transform the mainstream spices sector, thereby securing future sourcing and boosting economic growth in producing countries.

Prime Minister Narendra Modi on Tuesday urged scientists to take technology to farms for raising crop productivity at a time when the government is being attacked for surging prices of some essential commodities.

Pitching for greater use of research for boosting the agriculture sector, Modi gave the slogan “lab to land”, saying that farmers should be able to enhance production to increase their income and feed the country as well as the world.

“We have to prove two points. One is our farmers are capable of feeding the whole country and world, and second, agriculture is capable of filling the pockets of our farmers,” said Modi while addressing the 86th foundation day of the Indian Council of Agricultural Research.

He called upon all agriculture universities and colleges in the country – the heads of many of which participated in the function – to immediately prepare a data bank of progressive farmers in their adjoining areas and also digitize their research papers and thesis.

“We should target to digitize and compile all the research being done and already completed in agriculture universities,” Modi said.

In the season of elections animal spirits rule. India’s equity markets have been ebullient for some time now. Spurred by a robust inflow of foreign investment capital, markets have reacted favourably. A lot now depends on the ability of the next government to enact meaningful structural reforms, especially in a sector such as agriculture that requires modernization. Will things turn out as expected?

Reforms in agriculture are important for more than one reason. Apart from the huge number of people it employs, fortunes of the retail sector depends on what happens in farms. Infact, FDI in retail and modernization of agriculture are two faces of the same coin.

As far as the economic implications of retail FDI go, attention has been focused exclusively on its impact on the livelihood of local retailers, who are likely to take a hit on competition from the likes of Wal-Martand Tesco. The ability of local retailers to organize into an effective lobby voicing their concerns could perhaps explain this. The actual implications of retail FDI, however, are likely to extend well beyond the narrow confines the debate has been limited to.

Indian farmers are likely to be the biggest beneficiaries of a competitive retail sector, given the imbalances in the agricultural produce market. Restrictions imposed by the Agricultural Produce and Marketing Committee (APMC) Act have effectively barred them from selling their produce at remunerative prices, restricted the size of their potential market, and, most importantly, prevented competitive bidding for the produce.

Currently, the agricultural supply chain is monopolized by powerful middlemen and politically influential local groups who control mandis or wholesale markets—resulting in a huge wholesale-retail price gap. There could be little doubt that allowing FDI in retail, when complemented by scrapping the APMC Act to open up the market for wholesale procurement, will help farmers command better prices for their produce. It is likely to lead to better farming returns, increased production and lower prices for customers.

Insufficient investment in cold storage and other supply chain facilities is another major worry, but something that has been ignored for long. A study by the Associated Chambers of Commerce and Industry of India (Assocham) and Yes Bank points to the enormous shortage of warehousing capacity in India, estimated at around 35 million tonnes. The food grain wastage owing to the shortage is estimated at around 20% to 30% of the total harvest.

The reasons are not hard to find. India’s agricultural storage infrastructure was created at a time when food grains such as rice and wheat formed a disproportionate part of food consumption. It was assumed that dietary habits would remain constant for the foreseeable future. It made sense when rural incomes did not rise significantly. Even in urban areas, where food consumption was more diversified, demand for food grains remained high.

That pattern has changed dramatically in the last decade. With rising urban and rural incomes, food consumption has diversified greatly. Milk, eggs and other protein-rich diets are now a significant part of the food basket. A great part of food inflation is protein inflation, as the demand for these foodstuffs greatly outstrips supply.

Changing this requires fixing the broken supply lines with agricultural markets. For example, transporting milk to cities does not require food storage facilities but chilling plants and fleets of trucks equipped with cooling units. These investments need FDI in agricultural markets that cannot be made by governments not only due to financial constraints but also due to lack of expertise.

Given the gains that farmers and—more importantly—consumers could potentially reap, reforms aimed at strengthening the agricultural supply chain will obviously be welcome. However, reforms uprooting today’s deeply entrenched special interests will be hard to come by unless the political weight of farmers and consumers is combined for better results.

Amalgamated Plantations Private Limited is planning to introduce a brand of spices sourced from the Northeast, including pepper from its plantations, in the national market.

Pepper being grown in a nursery inside an APPL garden.

Guwahati, July 14: Amalgamated Plantations Private Limited, the second largest tea producer in the country, is all set to launch its brand of spices.

The tea major, which has been growing other crops on its estates, is aiming big vis-à-vis spices and wants to become a national player within five years.

“The idea is to have fair price aggregation and develop market linkages with the organised sector. APPL’s vision is to become the preferred provider of agri business supply solutions in the Northeast to ultimately benefit the farmer,” Prabir Banerjea, the chief operating officer of APPL’s agri business division, told The Telegraph.

The company is growing only black pepper — the most traded spice in the world — in its gardens. Black pepper, known as the king of spices, is known for its hot, biting flavour and pungent aroma. The latest price for black pepper in India ranges from Rs 35,000 to Rs 50,000 per quintal. The company sources other spices from different states of the region.

“The brand names are being shortlisted and our brands could hit the market by August,” Banerjea said.

The company started growing black pepper commercially from 2007 and the yield this year was 24 metric tonnes — 20 per cent higher than last year. As on date, the company has 200 hectares under black pepper cultivation.

He said the company planned to announce the origin of the produce and their USPs across marketing channels in the organised sector, as “at present, spices from the Northeast are being sold in mandis and nobody knows where these are coming from”.

Independent nurseries have been set up in all gardens to ensure self-sufficiency in planting material and high-yielding and drought-resistant varieties have been sourced from south India.

Banerjea said single polished turmeric fingers with specified curcumin content were recently sent to Olam International — a leading global integrated supply chain manager and processor of agricultural products and food ingredients — for export. “This is for the first time spices have been exported from the Northeast,” he said. The turmeric was mainly sourced from Assam’s Karbi Anglong district.

The company is also setting up a state of the art processing and packaging plant for spices and fruits aggregated from the Northeast at the North East Mega Food Park in Tihu. Construction will commence after the monsoon this year and trial production will start from the winter of 2014.

The official said the company’s entry into the spices sector in the Northeast would create national links for local produce, benefiting the farming community of the region.

Spices are high value export-oriented commodities, which play an important role in the country’s agricultural economy, as India is the principal source of spices in the global market. In the Northeast, black pepper is mainly grown in Meghalaya, which produces about 400 metric tonnes of the spice annually.

According to Spices Board, the Northeast has tremendous potential for largescale production of spices and it is anticipated that the region can create exportable surpluses at competitive prices, ensuring that the country stays on top in the international spices market.

In fact, the spices sector has been making strides in the Northeast and Spices Board has proposed an outlay of Rs 66.75 crore in the Twelfth Plan to promote the sector in the region. The Twelfth Plan focus is on development of large cardamom and other spices with respect to area expansion, irrigation and land development, mechanization, organic farming and post-harvest processing.

The Indian food and agriculture industry has made significant strides in the past three decades, meeting the challenge of securing production of basic staples to feed India’s growing population.

In 2010, India was the world’s biggest producer of mango, banana, papaya, milk, spices, sesame, and castor oil-seed. Agricultural GDP increased at an annual rate of 3% between 1980 and 2012, making India the third largest agricultural producer by value (closely behind China and the United States). In the past decade, despite structural barriers, the Indian farmer has matched domestic demand growth with commensurate yield increases. However, the sector is yet to realise its full potential in terms of yield, processing and exports.

A new FAIDA report by the Confederation of Indian Industry (CII) and McKinsey & Company shows that the industry presently achieves only 50 to 60% of the potential yield for most crops due to poor technology adoption; weak links between farmers and industry; unexplored opportunities in branding, marketing and exports; lack of end-to-end infrastructure from farm to table; and a dearth of extension support, research and innovation, and entrepreneurship.

At the same time, Indians are now spending much more on high value foods, and consumption is shifting from plant-based to animal-based protein, thanks to increasing disposable incomes and rapidly evolving consumer needs. And while agricultural productivity grew over the last decade, there has been a qualitative shift from basic food grains to high value agriculture, especially fruits and vegetables.

Between 2000 and 2010, high value produce moved from forming 38% to 45% of total produce by weight. The increase in the production of certain high value foods such as soya bean, potato, mango, banana, and poultry has been up to four times faster than basic produce like rice and wheat.

“It is now imperative that India upgrade its agricultural practices and techniques, as well as well as accelerate growth in allied business fields such as food processing, in order to support the country’s consumption demand changes over the next 20 years,” says Adil Zainulbhai, Chairman of McKinsey & Company in India.

“Future success depends on how India responds by ensuring sustainable supply to create a win-win situation for consumers and farmers. Robust agricultural growth can not only translate into greater exports, but also ensure poverty levels decrease at a rate faster than most other approaches, making it a necessary component of India’s inclusive growth model.”

“If India is to realise its vision of becoming a global powerhouse in food and agriculture, it needs a second Green Revolution,” says Rakesh B. Mittal, Past Chairman, CII National Council on Agriculture & Chairman FAIDA 3.

“We believe that India must shift from a programmes and schemes approach to a mission mode, to create an enabling environment and right policies for greater partnerships on PPP basis, attract large scale private sector investments and be aligned with the 12th Five Year Plan. We must look at inclusive and sustainable growth to ensure higher productivity and increased incomes for farmers,” Mittal said.

The report takes a long-term view of the country’s agriculture and high-value food industries to ascertain how India can raise agricultural productivity and farmer incomes; enhance customer value delivery in food; scale-up existing food and agriculture businesses by 3 to 5 times their current size; and develop the required capacity and enabling infrastructure, as well as relevant policies to support inclusive and sustainable growth. It suggests a detailed 12-point program, which could act as a roadmap for the sector as it sets its aspirations for 2030.

Key findings

Major demographic and socio-economic changes between 2000 and 2010, such as increasing population, increasing incomes, rural to urban migrations, and an increase in rural per capita productivity has resulted in major shifts in food consumption trends and production patterns.

Consumption demand is increasing, as India’s per capita GDP is expected to increase by 320% in the next 20 years, with a parallel increase in overall food consumption by 4% per annum from INR 11 lakh crore in 2010 to INR 22.5 lakh crore in 2030[2].

At the same time, processing could grow from INR 1.1 lakh crore in 2011 to INR 5.65 lakh crore by 2030, while India’s food exports could grow from INR 1.4 lakh crore in 2011 to INR 7.72 lakh crore by 2030.

The last decade witnessed yield increase across most crop categories, with a large scale shift to high-value agriculture: Agricultural productivity grew 8% over the last decade.

There has been a qualitative shift from basic foodgrains to high value agriculture, especially fruits and vegetables.

In 2000, basic foodgrains formed 60% of the total produce by weight, while high value produce formed only 38%.

By 2010, there was a shift to high value crops, which formed 45% of total production. The increase in the production of certain high value foods such as soya bean, potato, mango, banana, and poultry has been up to four times faster than basic produce like rice and wheat.

A study of each of the different crops shows a distinct shift by farmers to the high value portfolio in “pockets of excellence”, where strong demand–supply links have been forged, and increased yields and quality of produce have allowed successful exports in addition to catering to domestic demand.

Increased policy focus and public funding: A renewed policy thrust since the mid-2000s helped reverse the decline in agricultural growth of the 1990s.

There was a 4.35 times increase in total agriculture outlay from the 10th Five Year Plan to the 11th Five Year Plan.

The percentage outlay for agriculture increased from 5.2% in the 10th FYP to 5.6% in the 11th FYP. This was the highest proportion allocated to agriculture in the last 20 years.

Several landmark schemes have been introduced by the government in the agriculture sector since 2000, for example, the Rashtriya Krishi Vikas Yojana (RKVY), the National Food Security Mission, the Pulses Development Programme and the interest subvention scheme on crop loans.

However, while the last decade saw these positive trends, Indian agriculture also missed several opportunities to bolster growth.

Yield increases across crops have slowed over the last 4 decades: While the overall yield continues to improve, there has been no scalable success story of substantial yield improvement.

The few successes have been small, sporadic and led by the private sector. In fact, yield increase has actually slowed down across crops over the past few decades, even though these crops have still not attained their optimum.

Several possible reasons exist for this. Inadequate research quality, insufficient technology, and ineffective extension services to farmers translated into a lack of awareness of farming best practices and low technology adoption.

Outdated practices and inputs are another reason: outdated chemicals for fertilisers and pesticides, low investment in seed technology, and a heavy dependence on the monsoon season for irrigation.

Only 35 to 40% of cultivated land in India is irrigated and there is minimal penetration of new water saving technologies like drip irrigation.

Less than 10% of agricultural produce underwent processing in India: Valued at INR 66,000 crore in 2010 (at constant 2004 prices), the food and processing industry GDP in India is just 10% of the agricultural GDP.

Developed countries such as the United States consume over 60% of food across categories in the processed form.

The first FAIDA report envisaged that the processing sector would likely become an INR 215,000 crore to INR 225,000 crore sector in 2005 (at 2004 prices).

However, India has only partially realized the opportunity, mainly due lower demand for processed food and poor investment in infrastructure.

The few instances of corporate participation have shown their ability to create win-win solutions for all stakeholders by transforming value chains, improving yields and reducing wastage.

However, these successful pilots have failed to achieve scale. The lack of scale is primarily due to structural barriers in farm gate access and the lack of infrastructure to link the benefits of value addition to the consumer.

Systemic difficulties in farm gate access stem from three reasons—lack of adequate farm gate infrastructure (such as storage centres and primary processing centres), fragmented land holdings which make it difficult for companies to source consistent quality and quantity, and restrictive policies that limit farm gate access.

Unfulfilled export potential: India has made good progress in exports, going from INR 90,000 crore from 2006 to 2010 to INR 1.35 lakh crore in 2012.

However, import dependency on critical items such as pulses and edible oil remains high. This is despite the fact that India is the third largest producer of food globally, and has a sizable presence in several crops that are relevant to both the export market and industry.

The share of exports is about 12 to 14% of production. Low yields and poor infrastructure limit competitiveness, particularly from farm gate to markets and ports. Poor infrastructure for primary processing, packing, grading and inadequate cold chain storage have further held back Indian exports.

With improvements, the country could aspire to improve farmer income by over four times (in real terms) to keep pace and reduce the gap with national average income in 20 years.

Consumers could also benefit from the increase in supply to match per capita consumption, and access to safe and healthy food at affordable prices.

The report lays out 12 interventions that could transform the sector’s performance. Four of these are already aligned with the missions and projects announced in India’s 12th Five Year Plan (12th FYP):

A “National Agricultural Technology Mission” to create high yielding, disease-resistant seed varieties; set up targeted “farmer education” and distribution programmes; and promote mechanisation, technology and modern irrigation best practices.

Scalable farmer–industry partnerships to encourage various emerging models of successful interactions such as Farmer Producer Organisations (FPO) and Farmer Producer Companies (FPC), local aggregators to help farmers with extension services and yield improvement, organised agri-input retail to deliver suitable technologies and inputs to farmers, open PPP models and corporate farming for high-value agriculture for exports.

A favourable policy regime, which improves agricultural marketing mechanisms should enable farmers to decide to whom and where they can sell their produce and ensure incentives for strategic industry initiatives. The effectiveness of the current policy framework could be reviewed.

Food processing growth through an emphasis on branding to deliver customers a value proposition and brand promise for food delivered through a set of norms to assure freshness, healthiness, quality, traceability.

A “National Agriculture and Food Export Mission” in select categories to actively promote the export of select crops.

Currently, India loses out on exports with other producers due to the failure to be cost competitive, the lack of a powerful “Indian” brand in food, weak adherence to quality and safety standards and poor infrastructural linkages. In high-value agriculture categories particularly in several fruits and vegetables, India could aspire to be a top 5 global exporter

Private capital and world class expertise would ensure adoption of the latest technologies and practices in all parts of the agriculture and food value chain.

A “National Farm Gate to Market Infrastructure Authority” (NFMIA) could improve and better integrate the current farm gate infrastructure in terms of sorting, harvesting, packaging, storage and transportation through an integrated national master-plan. There are many bodies currently involved in building and managing different parts of this infrastructure. However, there is fragmentation and insufficient accountability for an integrated solution.

Mega demand servicing and export hubs will allow companies to procure, store, process and export from a single location. Such hubs will help put in place the necessary forward and backward linkages with consumption markets and agriculture production zones, along with the storage infrastructure and provide for comprehensive facilities across the value chain.

Agricultural extension services and new infrastructure creation are imperative to integrate technology into the farming system. The government could consider PPP models in extension services where possible, enforce performance standards at farmer training centres at the district level and improve quality of public extension services, and encourage scaling up of farmers cooperatives, as well as encourage agricultural institutes to participate actively in extension services.

Four to five world class food and agricultural universities and research laboratories to enable research and innovation, with commercialisation through private investment and market linkages.

This could be creation of new institutes and upgradation of existing agricultural universites

Agri-business focused angel and venture capital funds as a PPP initiative between central and state governments and private capital providers to lead the next wave of growth.

The central and state governments and private sector could contribute to a professionally managed fund to finance innovative entrepreneurship ideas, as well as set up “business incubation centres” to help farmers shape their business ideas and train them on aspects like financial management, marketing and commercialisation, and establishing networks with industries.

“These 12 interventions could meaningfully transform India’s food and agriculture sector and improve the welfare of all its stakeholders,” says Barnik Maitra, Partner, McKinsey & Company. “However, there must be strong collaboration between the centre, state, and industry for this to occur. Current governance and implementation mechanisms need to be significantly strengthened and new ones introduced to drive implementation.”

African nations like Zambia, Ethiopia and Mozambique invited Indian investors to invest in various sectors, especially in agriculture, saying this has the potential to provide food to both Africa and India.

Diplomats from the three countries showcased the immense potential and urged Indian investors to take advantage of the investor-friendly climate and a host of incentives they were offering.

They were addressing a session on “Doing business with African countries” organised by the Confederation of Indian Industry (CII) here Thursday.

The diplomats told the investors that by investing in their respective countries, they (the investors) can also reach out to markets in the entire Africa, Middle East and European Union.

With vast unutilised arable land, best agro-climatic conditions, a stable political system and investment incentives including 100 percent repatriation of profit, the African countries offer huge business opportunities to Indian investors, they said.

The diplomats said African nations were ideal destination for investment for Indian investors given the commonalities between India and Africa.

Susan Sikaneta, high commissioner of Zambia, said Indians with their good knowledge of agriculture, expertise and technology should come forward to invest in agriculture in Zambia, which is offering land and other incentives on first come, first served basis.

The central African country has 43 million hectares of land but only six million is being currently used.

“Chinese are coming in big numbers but we love Indians to come. You have passion for Africa. You are not like other countries which are interested only in making money,” she said advising investors not to miss the opportunity.

Eighty percent of Zambia’s 13 million population is dependent on agriculture. The investors can grow and export maize, cotton, wheat ando ther produce.

Maria Fatima G.C. Phume, deputy high commissioner of Mozambique, said only 15 percent of 36 million hectares of arable land in her country was utilised due to lack of agriculture technology.

She said Mozambique, which was one of the world’s fastest growing economies, offers excellent investment opportunities in agriculture,energy, mining and infrastructure.

“The investment in agriculture can not only secure food for our people but also for India. The investors can also export the agriculture produce to other African countries and Middle East,” she said.

With 23.4 million population, Mozambique has Portuguese as national language but English is widely used for business purposes

Jerusalem Amdemariam, minister counsellor, economic and business in the Ethiopian embassy, highlighted the investment incentives like 100 percent exemption from import duties. The investors are allowed to repatriate the entire profit. Agro-processing industries are also exempted from income tax for two to seven years

With 82 million population, Ethiopia is the second most populous African country after Nigeria and with its proximity to Middle East and Europe, offers access to big markets.

She said Indian government was collaborating in road developments and laying new railway lines. Ethiopia offers tremendous business opportunities in agriculture, manufacturing particularly agro-processing,food and beverages, she added.

I.Y.R Krishna Rao, Andhra Pradesh’s special chief secretary, cooperation and agri-marketing, said a delegation headed by state agriculture minister would soon visit Africa to explore investment opportunities in agriculture and allied sectors.

“We should really build up mutually beneficial relationship in agriculture which has tremendous implications in terms of food security in India and as well as Africa,” he said.

Rao said once African agriculture develops, it can to a large extent ensure food security of the world. “As a continent, in terms of agriculture, there is a lot of scope for development there,” he said.

Suchitra K. Ella, chairperson, CII-Andhra Pradesh, said there was tremendous scope for cooperation between India and the three African countries given their historic relationship and the commonalities.

March 18, 2012: The Union Budget identifies agriculture as one of the sectors which has shown a growth of 2.5 per cent in the current year. The Union Budget clearly establishes supply chain bottlenecks as one of the key issues in agriculture and one of the primary reasons for demand-supply gap and inefficiencies in post harvest distribution.

With an aim of “faster, sustainable and more inclusive growth” the Finance Minister has clearly identified “supply bottlenecks in agriculture and delivery systems” as one of the top five objectives that the government must address effectively in the ensuing fiscal year. Given that agriculture is recognised as central to our nation’s growth strategy, it is critical to implement measures planned to boost agricultural development and reduce supply bottlenecks in the union budget, and look for enablers that would allow us to achieve this objective.

AGRICULTURAL DEVELOPMENT – KEY FOCUS AREAS

Building on the four-pronged strategy of agricultural production, reduction in wastage of produce, credit support to farmers, and a thrust to the food processing sector envisaged in the previous budget, the finance minister has emphasised on the need to remove bottlenecks in production and distribution of food products that are driving inflation. Some of the key focus areas include:

Increasing farm productivity

The green revolution envisaged in the Eastern region of the nation has been given a further fillip by increasing the allocation to Rs 1,000 crore, an increase of 150 per cent with a focus on rice based cropping systems catering to the Eastern region’s requirements. This increase in allocation has been primarily due to the significant increase in yield and productivity as a result of this initiative.

The strategy for increasing production of agricultural commodities focuses on providing incentives to farmers through various development programmes. Outlay for programs under Crop Husbandry is Rs 18,215.78 crore, of which Rs 9,217 crore is for State Plan Scheme, ‘Rashtriya Krishi Vikas Yojna’.

A token provision of Rs 1 crore each has been proposed for new schemes, viz. National Mission on Agriculture Extension, National Mission on Seeds and Planting Material, National Mission on Agricultural Mechanisation, National Mission on Oilseeds and Oil Palm, National Mission for Sustainable Agriculture, Integrated Scheme for Farmers’ Income Security, Central Agriculture Infrastructure and Establishment Scheme and National Centre for Crop Statistics in order to further energise the role of these pivotal organisations.

In addition, the National Mission for Protein Supplements and the Accelerated Fodder Development Programme has been strengthened, and to improve productivity in the dairy sector, a Rs 2,242-crore project is being launched with World Bank assistance. To broaden the scope of production of fish to coastal aquaculture, apart from fresh water aquaculture, the outlay in 2012-13 is being stepped up to Rs 500 crore.

Increased access to farm credit

Reinforcing the need to increase the access to credit, the finance minister has raised the target of credit flow to farmers from Rs 4.75 lakh crore to Rs 5.75 lakh crore which represents an increase of Rs 1 lakh crore over the target for the current year. In addition, existing interest subvention scheme of providing short term crop loans to farmers at 7 per cent interest has been retained with additional subvention of 3 per cent to those farmers who repay their crop loans on time. In addition, the same interest subvention on post harvest loans up to six months against negotiable warehouse receipts will also be available, which will encourage the farmers to keep their produce in warehouses thereby providing a much needed post harvest agri-infrastructural support towards reducing farm gate wastage and giving pricing power to farmers.

Post harvest storage infrastructure

Post harvest wastage is a key inefficiency that needs to be corrected and in the budget the corpus of Rural Infrastructure Development Fund (RFID) has been increased from Rs 18,000 crore to Rs 20,000 crore with a special sub allocation of Rs 5,000 crore dedicated for warehouse development.

The Finance Minister has indicated that nearly 15 million tonnes capacity is being created under the Private Entrepreneur’s Guarantee Scheme, of which 3 million tonnes of storage capacity will be added by the end of 2011-12, and 5 million would be added next year.

To boost investment in post harvest infrastructure, capital investment in the creation of modern storage capacity has been made eligible for viability gap funding scheme of the Finance Ministry at an enhanced rate of 150 per cent as against the current rate of 100 per cent.

INCREASING PROCESSING INFRASTRUCTURE

With a view to retain the momentum of private investment in building the food processing capacity of the nation, the Plan outlay for 2012-13 of the Ministry of Food Processing Industries is Rs 660 crore. The allocation under all three components, i.e. mega food parks, cold chain, value addition and preservation infrastructure and modernization of abattoirs, have been maintained to upscale the execution of these schemes.

The Ministry has also proposed for a major shift in its role from implementing agency to policy formulation with greater involvement of State Governments through newly proposed centrally sponsored scheme of ‘National Mission on Food Processing’ for which Plan outlay of Rs 250 crores has been proposed for 2012-13.This Mission will enable the Government to have a better outreach and to provide more flexibility to suit local needs as well as ensuring greater Public –Private partnership in the Food processing sector.

FERTILISER AVAILABILITY AND USE

A mobile- based Fertiliser Management System (mFMS) has been designed to provide end-to-end information on the movement of fertilisers and subsidies, from the manufacturer to the retail level. This will be rolled out nation-wide during 2012. This step will benefit 12 crore farmer families, while reducing expenditure on subsidies by curtailing misuse of fertilisers

To reduce India’s import dependence in urea, the Government plans to finalise pricing and investment policies for urea. It is estimated by the government that with the implementation of the investment policy, country will become self sufficient in manufacturing urea in the next five years. In case of the potassic-phosphatic (P&K) fertiliser, use of single super phosphate (SSP) will be encouraged through greater extension work.

With a view to increase indigenous fertiliser production, the rate of withholding tax on interest payments on external commercial borrowings for capital investment in fertiliser production has been reduced from 20 per cent to 5 per cent for three years.

In addition, capital investment in fertilisers have been made eligible for viability gap funding scheme of the Finance Ministry at a rate of 150 per cent and imports of equipment for initial setting up or substantial expansion of fertiliser projects have been fully exempted from basic customs duty of 5 per cent for a period of three years up to March 31, 2015.

MEASURES THAT NEED FOCUS IN THE LONG TERM

While the budget has broadly focused on the short term imperatives of increasing agricultural production, increased access to farm credit and building post harvest storage and processing infrastructure, an aggressive perspective of trying to double agricultural growth needs to be envisioned. Some of the key enables for this jump-growth include:

Creation of agri-marketing infrastructure.

Incentivised shift towards drip-irrigation.

Incentives for farm machinery and technology.

Creation of a national policy on cropping pattern, with well defined market-linkages.

Creation of a national body collecting global commercial intelligence on crops.

Stable market-linked export-import policy.

CONCLUSION

The Union Budget’s focus on investment in farm production and post harvest management is commendable. However, as the demand for agriculture grows, future union budgets would need to focus on even larger scale investment into fundamental enablers of agricultural growth with a target of achieving at least 6-7.5 per cent per annum growth.